This website uses cookies to enable all functionalities for best performance during your visit. Should you wish to decline cookies to be sent to you, kindly adjust your browser settings accordingly. By continuing browsing this website, you are giving consent to the use of cookies on this website. See our Data Protection Policy for more details.

03 August 2005

StarHub Announces Q2 Earnings And Interim Dividend

The listing of the shares of StarHub Ltd on the SGX-ST was
sponsored by Credit Suisse First Boston (Singapore) Limited and UBS
AG, acting through its business group, UBS Investment Bank.

Singapore, 3 August 2005 - StarHub Ltd ("StarHub" or
"The Group") today announced a net profit of S$52.7 million
for the quarter ended 30 June 2005. This compares favourably against a
net loss of S$10.4 million for 2Q2004. The Group's operating revenue
totalled S$382.6 million, up 15.8% from S$330.4 million a year ago.
For the half-year ended 30 June 2005, its net profit was S$83.1
million compared to a net loss of S$46.6 million over the same period
in 2004. This was achieved on the back of 1H2005 operating revenue of
S$757.4 million, versus S$654.5 million for 1H2004.

StarHub's
EBITDA for the second quarter grew by a robust 46% to S$115.3 million,
compared to S$78.9 million in the prior year period. EBITDA as a
percentage of service revenue margin achieved a new quarterly high of
31.8%, 6.8 percentage points higher as compared to last year's 25.0%.
On a half-yearly basis, EBITDA surged 50.6% to S$214.6 million from
S$142.5 million previously, while EBITDA margin as a percentage of
service revenue expanded from 23.0% to 30.1%.

StarHub's free
cash flow for the quarter remained steady at S$45.7 million compared
to S$45.8 million in 2Q2004. Capital expenditures increased from
S$46.1 million to S$98.7 million for the latest quarter. This is
mainly attributable to payments made for the 3G mobile network and
other network capacity expansions. For the half year ended 30 June
2005, free cash flow rose significantly by 162.8% to S$95.0 million,
up from S$36.2 million previously.

In line with
the Group's change in depreciation rates for certain network assets
with effect from 1 January 2005, there was a reduction in depreciation
charges by $18.9 million in 2Q2005 and $48.0 million in the half year
ended 30 June 2005.

During the
quarter, on a year-on-year basis, three of the Group's four lines of
business recorded double-digit revenue growth. Broadband grew the
fastest at 43.3% due to increases in customer base and ARPU. Mobile
services grew 17.9%, driven by a larger customer base and strong ARPU,
while Cable TV achieved a 14.3% year-on-year growth rate made possible
by an increase in customer base, and strong ARPU generated in part by
a significant uptake in Digital Cable services.

For the quarter
ended 30 June 2005, earnings per fully diluted share were 2.46 cents,
up from a negative 0.49 cents in the prior year.

Cable TV
revenue grew 18.0% to S$126.7 million due to the larger customer
base and 11.6% growth in ARPU to S$45 from S$40 previously. This
came about from greater channel and service take-up by Digital
Cable subscribers and an increase in Sports package pricing in
4Q2004. Average monthly churn rate remained relatively unchanged
at 0.9% from 0.8% a year ago.

Broadband
continued to register the strongest growth rate at 45.8% to S$82.5
million compared with S$56.6 million previously. This was achieved
on the back of a larger customer base and improved ARPU which grew
7.7% to S$57, compared to S$53 for the year-ago period. Overall,
there was a greater mix of customers subscribing to the higher
tier price plans.

Fixed
Network revenue decreased 10.3% to S$104.8 million. This was
primarily due to planned lower revenue from traditional
international voice transit services, where margins had
declined.

1H2005 Business Highlights

Mobile
customer base grew 25.0%, representing a 31.5% mobile market share
as at 30 June 2005. StarHub's share of the market net adds for the
half-year was 57.2% as the mobile market penetration in Singapore
touched 96.3%. > GPRS traffic almost doubled to 1,372.4
gigabytes, while MMS traffic grew 87.6% to 7.7 million messages as
at 30 June 2005.

Cable TV
customer base grew 7.7% to 424,000 as at 30 June 2005, amounting
to a household penetration of 38.2% compared to 36.3% in the prior
year period. Strong take-up in Digital Cable services resulted in
a healthy growth in Digital Cable customers, thereby ending 1H2005
with a customer base of 117,000, which accounted for almost 28.0%
of total Cable TV customer base.

Residential
Broadband subscription-based customers jumped 37.6%, closing the
half-year at 247,000 customers. Based on the IDA statistics (which
includes pre-paid and wholesale customers), the total Broadband
customers represents 49.2% residential broadband market share, an
increase from 43.9% as at 30 June 2004. The monthly churn rate was
maintained at an all-time low of 1.0%.

StarHub's
unique Hubbing strategy continued to gain wider acceptance. The
percentage of StarHub customers who subscribed to any two or more
services rose from 39.2% a year ago to 44.8%. During this period,
the total number of households subscribing to at least one service
also grew to 690,000 households.

"StarHub's
second quarter performance continued to show that its revenue growth
is delivering greater operating efficiencies and expanding margins.
Each of our Mobile, Broadband, and CableTV businesses delivered double
digit growth. In view of our first half performance, we are upgrading
our guidance on full year revenue growth from high single digit
percentage to the low-teens," said Mr Terry Clontz, President and
CEO of StarHub.

"We are
also delighted to report that the number of households who subscribe
to two or more services from StarHub increased by 20% to 309,000
households over last year, indicating that more people are discovering
the quality service we deliver and taking advantage of the value and
convenience that hubbing with StarHub offers them."

"In view
of StarHub's current cash position, free cash flow, profitability
trend, and distributable reserves, we reaffirm our plans to pay a
recurring minimum annual cash dividend of eight cents per share. In
keeping with those plans, we are declaring an interim dividend of four
cents per ordinary share, payable on 9 September 2005. In addition,
shareholders will be pleased to know that StarHub is immediately
adopting a quarterly dividend payment schedule, with the next regular
dividend to be announced with the third quarter results ending 30
September 2005," added Mr Clontz.

Outlook for Year 2005 While competition remains keen in the mobile market, StarHub
will continue to focus on customer retention and encourage subscribers
to experience and enjoy the non-voice, lifestyle mobile contents that
are available across its multiple platforms. The Group will also
continue to drive broadband penetration in Singapore. On the Cable TV
front, StarHub will strive to introduce more value-added services to
stimulate more take-up of Digital Cable services. Other initiatives,
such as IP telephony services, are expected to be rolled out in the
next nine months.

Based on the
current outlook, and barring any unforeseen circumstances and changes
in economic and market conditions, the Group expects the growth in
operating revenue for fiscal year 2005 to be in the low teens. EBITDA,
as a percentage of service revenue, is expected to approach 30%, while
Capex, as a percentage of operating revenue, is targeted to be in the mid-teens.

For more
details on the Group's performance for 1H2005 and outlook for FY2005,
please visit www.starhub.com/ir. Materials
available at this website include the presentation and unaudited
results for the second quarter ended 30 June 2005.